Peso Falls as Investors Fear Recession

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Even with this devaluation, the Mexican peso continues to be one of the most stable currencies, given the expectation that Banxico will continue to adopt a restrictive stance.

The peso traded at 20.20 units per dollar near the close of this Friday’s session, depreciating 1.35 percent against Thursday’s reference price.

The Mexican currency lost ground as investors were pessimistic, turning away from risky assets, as economic data pointed to a global recession sooner than expected.

dollar in bank

  • BBVA Mexico : 20.45 pesos
  • Citibanamex : 20.67 pesos
  • Banorte : 20.45 pesos
  • Azteca Bank : 20.09 pesos
  • Santander : 20.70 pesos

The session did not have relevant economic data in Mexico and the focus was on the disappointing data that the S&P Global Composite Purchasing Managers’ Index (PMI) published on Friday for the United States and Europe.

US business activity contracted for the third month in a row in September, while in the euro zone, a drop in that same indicator raised fears that the economy could slip into recession as consumers curb spending in the face of the cost-of-living crisis.

In addition, the United Kingdom announced a historic tax cut and a huge increase in borrowing, an economic program that hit financial markets, with the pound and British government bonds in free fall.”The information released today shows that the recession cycle for the global economy is closer than expected,” Monex analysts said.

Even with this devaluation, “during the week, the Mexican peso continues to be one of the most stable currencies, given the expectation that the Bank of Mexico (Banxico) will continue to adopt a restrictive stance on September 29,” said Gabriela Siller, director Base Bank analysis.

Mexico Daily Post